Michael Martin today announced he would "relinquish" his post as Commons Speaker in the wake of calls for him to go because of his failure of leadership over the expenses scandal.

In a brief address, Martin told MPs that the house was "best when it is united".

He added: "In order that unity can be maintained I have decided I will relinquish the office of Speaker on Sunday 21 June. This will allow the house to proceed to elect a new Speaker on Monday 22 June. That is all I have to say."

His spokeswoman said later the Speaker would stand down as MP for Glasgow North East on 21 June, heralding a byelection in the traditionally safe Labour seat. He is likely to be given a peerage.

Gordon Brown paid a brief tribute to Martin at a press conference this afternoon, ahead of calling for "fundamental" changes needed to clean up the expenses system.

Martin – the first Commons Speaker forced to resign in 300 years – had a record of 30 years in public service of which he and his family "should be proud", the prime minister said.

"It is a measure of his professionalism and diligence that today, after his announcement, he chaired a meeting with all parties to see how we can reform the system of MPs' expenses."

The Speaker is the most high-profile casualty of the expenses catastrophe so far. Some MPs believe that he has been made a scapegoat for the failure of the Commons as a whole, although Martin has faced persistent accusations of incompetence since his election in 2000.

But what seems to have persuaded Martin to go was the reaction when he made a statement in the Commons yesterday apologising for his role in the expenses affair. In scenes for which there is no precedent in modern times, MPs from all sides of the house told him to his face that he should quit.

Martin's predecessor, Lady (Betty) Boothroyd, said after the Speaker's announcement that he had taken "the initial brunt" of the criticisms levelled against the Commons for its failure to observe the high standards of ethical conduct expected of it.

She said that while Martin's decision to resign was an "honourable one" much work remained to be done before the public would be convinced the Commons had entered an era of openness. "I warned when I retired as Speaker that the reputation of the Commons was already at a low ebb," said Boothroyd, in a statement issued this afternoon.

"I noted the public's disillusionment in my farewell speech and drew attention to the troubling levels of cynicism and indifference, especially among young people ... Little has changed and recent events have made matters worse. The Commons must bear a collective guilt in this. Successive governments have ignored their duty to respect the primacy of parliament and MPs have allowed it to happen."

Carswell, the Tory MP who led efforts to oust the Speaker with a motion of no confidence tabled yesterday, said after Martin's resignation: "It had to happen. It was not a nice business. It's been extremely unpleasant work. I did this regretting I had to do it."

He added that the next Speaker would have to bring the Commons into the modern world. "This gives us a unique opportunity now to create a new House of Commons that is not a caste apart. We have to modernise the building and make it suitable for the age of YouTube."

Senior Labour MP Sir Stuart Bell, a friend of the Speaker who has defended him in recent days, said: "I think he recognised that unity in the house was not there and therefore he did the noble thing."

He welcomed Martin's apology yesterday but accused him of creating a sense of "uncertainty" about his future and losing control of the house.

"A Speaker of the House of Commons must have authority," he said. "Michael Martin clearly lost it yesterday."

He added: "I think he paid a heavy price for trying to be an establishment figure when the establishment was falling away."

Martin, a former sheet-metal worker from Glasgow and the first Catholic to hold the office of Commons Speaker, was seen as an obstacle to reform because he chairs the House of Commons commission, the body in charge of Commons administration.

The chairman of Martin's local Labour party praised him today.

Gerry Leonard said after the Speaker's announcement that he hoped his decision "is a personal one".

Leonard added: "It is totally wrong that some Tory and Lib Dem MPs have been trying to use his office as a distraction from their own mistakes and errors of judgment.

"I also think there has been some prejudice from some quarters."

Under new Commons rules, the next Speaker will be chosen by secret ballot.

Today bookmakers made Sir Alan Haselhurst, the Tory MP who is the most senior of the three deputy Speakers, former minister Frank Field and Sir Menzies Campbell, the former Liberal Democrat leader, three of the favourites to succeed Martin.

The critical reaction outside Westminster appears to have persuaded Martin to go. Eight days ago, Martin also astonished some MPs when he criticised two MPs in the chamber, Labour's Kate Hoey and the Lib Dem Norman Baker, because they had been critical of the House of Commons commission's handling of the issue.

Today Baker said that Martin's decision was "the right decision to take". He said that although Martin had had "immense difficulties", he had also made some positive contributions that should be remembered.

"He had to go for the sake of parliament. That does not stop us feeling sorry for him on a personal basis," Baker said.

Sir Alistair Graham, the former chairman of the committee on standards in public life, said that Martin was an obstacle to reform.

"He did rather act like a shop steward for MPs and he didn't have the stature and charisma once the crisis hit parliament to find a way through so he was just the wrong person for that situation and hopefully parliament is now going to put that right," Graham said.

Paul Flynn, a Labour MP who signed Carswell's motion of no-confidence, said: "I'm afraid that [Martin] has brought this on him self. Parliament has to reform itself. He was the wrong person to do it."

Flynn said that some of the attacks on Martin were unfair, but that it was wrong for Martin to attack the "whistleblowers" who had complained about the Speaker's handling of events.

Flynn also said that he would be supporting the Tory MP John Bercow as the next Speaker because he had the potential to produce "radical reform".